Revenue for the third quarter of 2018 was $162.0 million, compared to
$155.9 million for the same period last year.

GAAP gross margin was 48.7% for the quarter, compared to 48.3% for the
same period last year.

Non-GAAP gross margin was 52.1% for the quarter, compared to 52.5% for
the same period last year.

GAAP operating income for the quarter was $3.4 million, compared to
operating loss of $6.9 million for the same period last year.

Non-GAAP operating income for the quarter was $8.2 million, compared
to operating income of $8.1 million for the same period last year.

GAAP net loss for the quarter was $0.7 million, or ($0.01) per diluted
share, compared to a net loss of $10.2 million, or ($0.19) per diluted
share, for the same period last year.

Non-GAAP net income for the quarter was $5.7 million, or $0.11 per
diluted share, compared to Non-GAAP net income of $4.1 million, or
$0.08 per diluted share, reported for the same period last year.

GAAP R&D expenses, net for the quarter amounted to $25.8 million, an
increase of 18.5% compared to the same period last year.

The Company generated $5.0 million in cash from operations during the
third quarter and ended the period with $348.9 million in cash and
cash equivalents.

“We are pleased with our results this quarter, reflecting continued
strength in our high-end systems orders, utilization rates and our parts
services business,” said Elchanan (Elan) Jaglom, Interim Chief Executive
Officer of Stratasys. “The level of engagement we are experiencing with
customers in our key verticals is encouraging, as we highlighted at the
recent International Manufacturing Technology Show. And we are excited
about the innovation we plan to bring to market to drive incremental,
long-term opportunities, as we continue to invest in new products and
materials across our portfolio of FDM and PolyJet technologies, our new
metal additive manufacturing platform, and advanced composite materials.”

Financial Guidance:

Stratasys today updated the following information regarding the
Company’s guidance for projected revenue and net income for the fiscal
year ending December 31, 2018:

Revenue guidance of $670 to $680 million, compared to previous
guidance of $670 to $700 million.

GAAP net loss of $10 to $2 million, or ($0.19) to ($0.04) per diluted
share, compared to previous guidance of net loss of $41 to $25
million, or ($0.75) to ($0.46) per diluted share.

Non-GAAP net income of $27 to $30 million, or $0.50 to $0.55 per
diluted share, compared to previous guidance of net income of $16 to
$27 million, or $0.30 to $0.50 per diluted share.

Non-GAAP operating margins are unchanged at 4.5% to 6%.

Stratasys also updated the following guidance regarding the Company’s
projected performance and strategic plans for 2018:

Capital expenditures are projected at $25 to $35 million, compared to
previous projection of $30 to $40 million.

The Company’s guidance reflects increased investments in R&D, tools,
materials, and additional resources aimed at expanding addressable
markets by accelerating development efforts for the new metal additive
manufacturing platform, further advancements based on its FDM and
PolyJet technologies, and specific go-to-market initiatives in order to
deepen customer engagement.

Given the expected ongoing negative impact of not recording a tax
benefit on U.S. tax losses on the Company’s non-GAAP net income, the
Company believes that the rate of growth in its non-GAAP operating
income is the best measure of its performance.

Non-GAAP earnings guidance excludes $34 million of projected
amortization of intangible assets; $16 to $17 million of share-based
compensation expense; net gains from divestitures of $23 to $22 and
reorganization related expense of $6 to $7 million; and includes ($1) to
$1 million in tax expenses (income) related to non-GAAP adjustments.

“We ended the quarter with positive cash generation and expense controls
that drove efficiencies and maintained operational discipline as we
continue to invest in research and development to expand our portfolio,”
continued Jaglom. “We believe we have the best go-to-market execution
strategy in the industry and are focused on delivering new, innovative
solutions in the coming years that will drive strong, profitable top and
bottom-line growth.”

Stratasys Ltd. Q3 2018 Conference Call Details

The Company plans to hold the conference call to discuss its third
quarter financial results on Thursday, November 1, 2018 at 8:30 a.m.
(ET).

To participate by telephone, the domestic dial-in number is (866)
394-5776 and the international dial-in is (409) 350-3596. The access
code is 2963439.

Investors are advised to dial into the call at least ten minutes prior
to the call to register. The webcast will be available for 90 days on
the "Investors" page of the Stratasys Website or by accessing the
provided web address.

Stratasys is a global leader in additive manufacturing or 3D
printing technology, and is the manufacturer of FDM® and
PolyJet™ 3D Printers. The Company’s technologies are used to create
prototypes, manufacturing tools, and production parts for industries,
including aerospace, automotive, healthcare, consumer products and
education. For 30 years, Stratasys products have helped manufacturers
reduce product-development time, cost, and time-to-market, as well as
reduce or eliminate tooling costs and improve product quality. The
Stratasys 3D printing ecosystem of solutions and expertise includes: 3D
printers, materials, software, expert services, and on-demand parts
production. Online at: www.stratasys.com,
http://blog.stratasys.com and
LinkedIn.

Stratasys is a registered trademark and the Stratasys signet is a
trademark of Stratasys Ltd. and/or its subsidiaries or affiliates. All
other trademarks are the property of their respective owners.

Cautionary Statement Regarding Forward-Looking Statements

The statements in this press release regarding Stratasys' strategy, and
the statements regarding its projected future financial performance,
including the financial guidance concerning its expected results for
2018, are forward-looking statements reflecting management's current
expectations and beliefs. These forward-looking statements are based on
current information that is, by its nature, subject to rapid and even
abrupt change. Due to risks and uncertainties associated with Stratasys'
business, actual results could differ materially from those projected or
implied by these forward-looking statements. These risks and
uncertainties include, but are not limited to: the degree of market
acceptance of our 3D printers, high-performance systems and consumables,
and the software and technology included in those systems; potential
declines in the demand for, or the prices of, our products and services,
or volume of our sales, due to decreased demand either for them
specifically or in the 3D printing market generally; potential further
charges against earnings that we could be required to take due to
impairment of additional goodwill or other intangible assets; potential
shifts in our product mix to lower-margin products or in our revenues
mix towards our AM services business; any failure to adequately adapt
our infrastructure and properly integrate the internal and external
sources of our growth to generate intended benefits (including from the
companies that we recently acquired); the impact of competition and new
technologies; risks related to our relationships with our suppliers,
resellers and independent sales agents, and our operations at our
manufacturing sites; risks related to the international scope of our
operations and regulatory compliance (including reporting,
environmental, anti-corruption and other regulatory compliance) related
to that scope of operations; risks related to the security of our
information systems (including risks related to potential
cyber-attacks); changes in the overall global economic environment or in
political and economic conditions in the countries in which we operate;
changes in our strategy; costs and potential liability relating to
litigation and regulatory proceedings; and those additional factors
referred to in Item 3.D “Key Information - Risk Factors”, Item 4,
“Information on the Company”, Item 5, “Operating and Financial Review
and Prospects,” and all other parts of our Annual Report on Form 20-F
for the year ended December 31, 2017 (the “2017 Annual Report”),
filed with the Securities and Exchange Commission (the “SEC”) on
February 28th, 2018. Readers are urged to carefully review
and consider the various disclosures made throughout our 2017 Annual
Report, and the Report on Form 6-K that attaches Stratasys’ unaudited,
condensed consolidated financial statements as of, and for the quarter
and nine months ended, September 30, 2018, and its review of its results
of operations and financial condition for those periods, which has been
furnished to the SEC on or about the date hereof, and our other reports
filed with or furnished to the SEC, which are designed to advise
interested parties of the risks and factors that may affect our
business, financial condition, results of operations and prospects. Any
guidance provided, and other forward-looking statements made, in this
press release are made as of the date hereof, and Stratasys undertakes
no obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events or
otherwise, except as required by law.

Use of non-GAAP financial measures

The non-GAAP data included herein, which excludes certain items as
described below, are non-GAAP financial measures. Our management
believes that these non-GAAP financial measures are useful information
for investors and shareholders of our Company in gauging our results of
operations (x) on an ongoing basis after excluding mergers, acquisitions
and divestments related expense or gains and reorganization-related
charges or gains, and (y) excluding non-cash items such as stock-based
compensation expenses, acquired intangible assets amortization,
including intangible assets amortization related to equity method
investments, impairment of long-lived assets, changes in fair value of
obligations in connection with acquisitions and the corresponding tax
effect of those items. These non-GAAP adjustments either do not reflect
actual cash outlays that impact our liquidity and our financial
condition or have a non-recurring impact on the statement of operations,
as assessed by management. These non-GAAP financial measures are
presented to permit investors to more fully understand how management
assesses our performance for internal planning and forecasting purposes.
The limitations of using these non-GAAP financial measures as
performance measures are that they provide a view of our results of
operations without including all items indicated above during a period,
which may not provide a comparable view of our performance to other
companies in our industry. Investors and other readers should consider
non-GAAP measures only as supplements to, not as substitutes for or as
superior measures to, the measures of financial performance prepared in
accordance with GAAP. Reconciliation between results on a GAAP and
non-GAAP basis is provided in a table below.